KG Group to Return Half of Profits to Shareholders Over Next Five Years

KG Group announced that it will return half of its net profits to shareholders over the next five years, focusing on a robust shareholder return policy while presenting long-term growth strategies. The company aims to prioritize the normalization of its undervalued corporate worth as a key management task.

On June 9, KG Group held a press conference in Yeouido to unveil its long-term management plan.

The event featured CEOs from six major listed subsidiaries, including KG Chemical, KG Eco Solutions, KG Mobility (KGM), KG Steel, KG Inicis, and KG Financial, who each shared their future development strategies.

The subsidiaries plan to increase their total shareholder return rate to 50% over the next five years. This decision stems from the belief that the market value does not adequately reflect the companies' solid performance and financial health. Chairman Kwak Jae-sun stated, "We have decided to return 50% of our net profits to shareholders, and we promise that all six listed companies and K Car will maintain this commitment for five years."

To achieve this, KGM will focus on two tracks: eco-friendly vehicles and the KD (knock-down) assembly business, aiming to sell 200,000 units and generate over 10 trillion won in revenue by 2030. The company plans to sequentially launch seven types of eco-friendly SUVs, including pure electric vehicles (EVs), hybrids (HEVs), and plug-in hybrids (PHEVs). Additionally, KGM will target the Middle East and Southeast Asia as key markets for its KD business.

KGM CEO Hwang Gi-young announced, "We will start operations at our KD factory in Vietnam this September," adding that plans for Bangladesh, Myanmar, and Cambodia are still under consideration. Chairman Kwak also mentioned, "We recently launched the Musso in Chile, and our executive is currently in Brazil and Colombia, working with various partners to begin certification processes for our KD business in Latin America."

Furthermore, KG Group is pursuing synergy strategies with K Car, the largest direct-used car platform company in South Korea, which is set to join the group. In April, KG Steel agreed to acquire a 400 billion won stake in K Car from Han & Co Auto Service. K Car will be fully integrated into KG Group as of June 30.

This integration will allow KGM to enhance its certified used car business by leveraging K Car's capabilities, expanding its offerings to a wider range of vehicle brands. Additionally, K Car, which absorbed Joy Rent-a-Car in 2020, is expected to incorporate KGM vehicles into its corporate leasing and rental sectors. Chairman Kwak emphasized, "KGM must continue to invest, and in that sense, K Car is a financially stable company, so investing in it will create synergies."